Colorado § 15-12-1309 - Effective date - applicability.

§ 15-12-1309. Effective date - applicability.

This part 13 shall take effect July 1, 1993, and shall apply to all proceedings commenced on or after said date.

Source: L. 93: Entire part R&RE, p. 1244, § 1, effective July 1.

PART 14

COLORADO UNIFORM ESTATE TAX APPORTIONMENT ACT

PREFATORY NOTE

The Internal Revenue Code places the primary responsibility for paying federal estate taxes on the decedent's executor and empowers, but does not direct, the executor to collect from recipients of certain non-probate transfers included in the taxable estate a prorated portion of the estate tax attributable to those types of property. In the absence of specific contrary directions of the decedent, the Code generally provides as to other transfers that taxes are to be borne by the persons who would bear that cost if the taxes were paid by the executor prior to distributing the estate. The determination of who should bear the ultimate burden of the estate taxes is left to state law.

If a state does not have a statutory apportionment law, the burden of the estate taxes generally will fall on residuary beneficiaries of the probate estate. This means that recipients of many types of nonprobate assets (such as beneficiaries of revocable trusts and surviving joint tenants) may be exonerated from paying a portion of the tax. Also, it generates a risk that residual gifts to the spouse or a charity may result in a smaller deduction and a larger tax. A number of states have adopted legislation apportioning the burden of estates taxes among the beneficiaries.

The National Conference of Commissioners on Uniform State Laws' original Uniform Estate Tax Apportionment Act, completed in 1958, was superseded in 1964 by a revision later incorporated into the Uniform Probate Code as UPC § 3-916, a section that was slightly changed in 1982. The project to replace the 1964 Act and the Uniform Probate Code section with an updated version was announced at the Conference's 1999 annual meeting, but did not get underway until the first meeting of the drafting committee in November of 2000. The current Act was approved and recommended for enactment in all states at the annual meeting of the National Conference of Commissioners on Uniform State Laws in August 2003.

The Act continues to advance the principle of the 1964 Act that the decedent's expressed intentions govern apportionment of an estate tax. Statutory apportionment applies only to the extent there is no clear and effective decedent's tax burden direction to the contrary. Under the statutory scheme, marital and charitable beneficiaries generally are insulated from bearing any of the estate tax, and a decedent's direction that estate tax be paid from a gift to be shared by a spouse or charity with another is construed to locate the tax burden only on the taxable portion of the gift. The Act provides relief for persons forced to pay estate tax on values passing to others whose interests, though contributing to the tax, are unreachable by the fiduciary. The Act also addresses the allocation of the burden incurred because of several federal transfer tax provisions that did not exist when the 1964 Act was adopted.